Jacksonville builders seek extension of mobility fee moratorium

[Bridges]

Here we go.

www.bizjournals.com/jacksonville/print-edition/2012/09/28/jacksonville-builders-seek-extension.html?ana=e_ph

The new L.A. Fitness Inc. at Atlantic and Kernan boulevards wouldn’t have been built if the city hadn’t imposed a moratorium on construction fees, developer Toney Sleiman said.....

....“I really think it worked — I know it worked for me,” Sleiman said of the moratorium. “I would have never built the L.A. Fitness at Atlantic and Kernan if I didn’t have that waived, because the numbers didn’t work out on the deal for the rent they wanted to pay.”

[vicupstate]

Is the 1/4 million figure that Sleiman quotes correct or is he padding it? 

[tufsu1]

what is Toney's point....that the one LA Fitness wouldn't have been built?  Because I think there are more than 10 being built all over town at Sleiman properties.

[Bridges]

what is Toney's point....that the one LA Fitness wouldn't have been built?  Because I think there are more than 10 being built all over town at Sleiman properties.

That seems to be exactly his point.  But considering LA Fitness has been on a tear of opening up new stores over the past year, taking advantage of the downturn and opened anchor store locations, I'd say they'd go pretty much anywhere they feel there would be business.  They've been buying competitors and stores at a fast pace.

Building new stores in Hillsbourough http://www2.tbo.com/lifestyles/health-4-you/2012/jun/19/7/report-la-fitness-to-purchase-lifestyle-family-fit-ar-417832/

LA Fitness plans from a year ago:  http://retailtrafficmag.com/management/siteoptimizer/la_seizes_moment_opportunity_06232011/

[thelakelander]

I can't read the article but I was interviewed for it a few days back.  LA Fitness, 7-11's, etc. expansion plans have nothing to do with Jacksonville charging or not charging a mobility fee, concurrency or whatever.  In fact, that LA Fitness deal was locked up before the moratorium even went into place. That shopping center (The Fountains) was also under development before the mobility plan was approved.  Switching from the old concurrency system to the mobility fee actually saved Sleiman over $600k.  Now he's simply pocketing the extra cash since this deal was based on there being a market for LA Fitness in this region.


The Fountains site plan

In addition, that particular project is a big suburban box with a huge surface parking lot in front of it.  The mobility fee's credit adjustment system is something that would have even further reduced the cost of this particular LA Fitness.  However, to trigger those credit adjustments, the site's design would need to be more multimodal friendly, which would reduce the amount of auto trips Sleiman's development would put on the surrounding infrastructure network, which is one of the major goals of the mobility plan/fee.

[thelakelander]

Btw, here is the list of projects that applied for fee waivers during the moratorium:



Also, here's some general information into how LA Fitness selects their sites and typical buildout costs...

Since LA Fitness is very focused on securing the right locations for its chain, Horner gives the impression that the company won’t quibble over rent when it finds great sites. Plus, since grocers and many of the big-box tenants that served as anchors or junior anchors in their heyday typically drove aggressive deals, when LA Fitness takes over their locations it’s almost a given that it will be paying higher rents, adds Kinsella.

The chain makes up for the difference by asking landlords to contribute a substantial amount toward its build-out costs. When taking over existing buildings, the clubs need to have swimming pools installed, and remove columns from common areas. Former grocery stores, in particular, present challenges because their buildings often can’t support the kind of energy-efficient HVAC systems that LA Fitness employs. As a result, it costs on average $700,000 to retrofit an existing retail location into a club. Ground-up construction can cost as much as $3 million.

Full article from Retail Traffic Magazine: http://retailtrafficmag.com/management/siteoptimizer/la_seizes_moment_opportunity_06232011/

Also, a retroffit of an existing retail location (think of all the empty retail boxes and strip malls we have....even on Atlantic!) would have resulted in no fee anyway.

[Ocklawaha]

Great work 'Bridges' and 'Lake' but I don't think our City Council, with the exception perhaps of a few stars, is smart enough to figure out they've been duped by Toney. Lake I wonder if your chart could show the old concurrency system costs side by side?

How anyone can think a slight reduction in fees and a small tweak of the parking lot plans can somehow add to their costs is beyond me. None of them seem to realize the QOL improvements that WILL HAPPEN with the mobility plan should put us on par with many of our peer cities.

Perhaps we can recruit the likes of Peyton, Delaney, Moran etc... to assist with a full court press? This time around we need to fill the chambers with protesters. 

[Bridges]

Btw, here is the list of projects that applied for fee waivers during the moratorium:

How does that list compare with a normal year?  More applications?  Less?  Same as previous year? 

[fsujax]

you can best believe Tony has been working the council on this issue.

[thelakelander]

He's working the mayor's office probably moreso than the council.

[CityLife]

I'm holding the trump card....

SeaGrass Apartments, who had about a third of the total of all mobility fees waved ($603,525) did not even know about the mobility fee moratorium when they were going to permitting.

Suck on that Sleiman.

[thelakelander]

Regarding this particular LA Fitness site, there are a few more things we've already given Sleiman to help him make a profit off his property.

1. In 2010, the City waived nearly $15 million in concurrency he owed for this project.

article: http://jacksonville.com/news/metro/2010-04-06/story/megastore-gives-jacksonville-developer-city-more-time

2. That same year, taxpayers fully funded a $47 million overpass with Better Jacksonville Plan dollars at that intersection.

article: http://m.jacksonville.com/news/metro/2010-10-04/story/jta-opening-new-flyover-tuesday-atlantic-boulevard-over-kernan-boulevard

Over $50 million to help improve the marketability of this location and we're still asked to pay more?  Quite frankly, at this point, this project has been so heavily subsidized it will never return the amount of cash we've got sitting in it.

[dougskiles]

Ock-fix

That quote is from their press release about a year ago.  No where was it mentioned that they came to Jacksonville because of a Mobility Fee moratorium.  Granted, they may have gone to that particular site because of the moratorium.  With the moratorium, they probably would have gone to re-energize an existing shopping center nearby.

Which begs the question, why aren't the owners of declining shopping centers complaining about the devaluation of existing supply?

I wish I knew how to make this point more clearly to the writers of the Business Journal.  Ennis and I both provided detailed information about this issue to the writer of the article.  I haven't yet read the remainder of the story - perhaps there was more to it.  If anyone has access to it, please post it.

[cline]

Great work 'Bridges' and 'Lake' but I don't think our City Council, with the exception perhaps of a few stars, is smart enough to figure out they've been duped by Toney.

Or they just don't care.  The Council is owned by the Sleiman's of this City, which unfortunately, is why they will probably extend the moratorium.  And if that happens, you can pretty much kiss any chance of it coming back goodbye.

[dougskiles]

^That kind of defeatist attitude is why things like this keep happening.

Keep your chin up!  Fight the good fight, man!